Study: Some Florida Private Insurers Cost Less than Citizens

Citizens Property Insurance Corp. chairman Carlos Lacasa expressed "surprise" at examples of rates that were sometimes higher than private competitors. Citizens staff used rates already on file with the state by four unidentified private insurers and is planning a more comprehensive study.

The workshop in Miami was designed to highlight rate inadequacy and consider whether to uncap rates for new customers beyond a 10 percent annual cap approved by legislators. Coverage for sinkholes on Florida's west coast continues to be a vexing problem, for example, but not all the information supported substantial rate increases backed by Gov. Rick Scott and the private insurance lobby. Scott has called Citizens rates "artificially low."

Example: A coastal customer with a 35-year-old home in Palm Beach County, insured for $225,000 and lacking certain roof discounts, pays $3,390 a year with Citizens -- but at least one private insurer is offering coverage for $3,177.

Or take an older inland house insured for $125,000: At least one private insurer is charging $2,010, below the Citizens rate of $2,196.

Most rates quoted from private insurers were indeed higher, but Citizens was often close to the lowest-priced competitors. For instance, a five-year-old inland home in Palm Beach County with roof discounts and insured for $125,000 cost $630 with Citizens, compared to $650, $661, $825 and $890 with private carriers.

Lacasa asked whether these private insurance rates were available to customers -- and if so, why the private carriers were not taking more business.

Citizens staffers said private carriers are often very selective about accepting new customers in South Florida to limit risk, and not just any customer might be able to obtain those rates -- plumbing or wiring improvements might be required in older homes, for example. Those limitations were very difficult to capture in an "apples to apples" rate comparison, staffers said.

Still, the survey showed rates are not always the only factor involved in efforts to shrink Citizens with 1.4 million customers and 140,000 in Palm Beach County.

Earlier in the day, the carrier's actuarial committee approved certain changes in deductibles and coverage reductions the full board will consider next week. One measure is a $15,000 limit on certain kinds of water damage such as plumbing leaks, and another is a choice of non-hurricane deductibles of 1, 2 and 5 percent.

Some Citizens board members continue to press the case for higher rates, but new president Barry Gilway said he senses "little appetite" for dramatic increases that would hurt the state's economy.

Some homeowner advocates welcomed the president's approach.

"We are cautiously optimistic that Mr. Gilroy can reverse the culture at Citizens away from rate hikes at all costs," said Sean Shaw, founder of advocacy group Policyholders of Florida. "It was refreshing to hear Mr. Gilroy use the word balance. Without affordable insurance options in our state, especially for our most vulnerable policyholders, we will never see a full housing recovery."